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Home Values Up 11.6 Percent Over Last Year

May 19, 2021
Digital photo of an up arrow and coins featuring the dollar sign.

Ever increasing demand and dwindling supply have driven record-breaking price values on homes in the past year, according to Zillow’s latest market report. In April, annual home value growth for a typical US home is 11.6%, the highest seen since 2005.

Home value appreciation leading up to April has had the fastest monthly growth since 1996. However, as the market makes enormous leaps in home values, homes are still selling a record-breaking pace. Nationally, it takes an average of 7 days after listing before a seller accepts an offer, but in the Midwest markets of Kansas City, Columbus and Cincinnati are seeing listings disappear in just three days.

The persistent double-digit price appreciation surpasses what we saw in 2007, but there is no housing bubble, as many people may fear. Google searches for “housing bubble” reached their highest point in 3 years, but Zillow economist, Jeff Tucker, assures us the market is built on stronger fundamentals this time.

“Unlike the combination of speculators and people spending beyond their means with non-traditional loans in 2004 and 2005, today's homebuying demand is driven by well-qualified buyers locking in traditional, fixed-rate mortgages,” Tucker said. “Builders are firing on all cylinders to meet the excess demand brought by low mortgage rates and millions of Millennial buyers jockeying for limited homes, but after more than a decade of underbuilding, homes will remain scarce until existing homeowners feel more comfortable selling or prices rise enough to restore balance."

Zillow's Home Value Index (ZHVI) shows that US home values reached $281,370 in April. Monthly appreciation has been increasing since May, and April’s 1.3% increase over March is the largest jump in Zillow data since 1996.

Major metros leading in-home appreciation include Austin (25.5%), Phoenix (20.4%) and Salt Lake City (18.3%), though 39 of the top 50 metros are seeing double-digit increases over the year. Boise, Idaho, leads the top 100 metros with 32.5% annual value growth.

First-time buyers, Tiauna and Tyler Hansen placed offers on about 15 homes before closing on a 2 bedroom, 1 bathroom house near Boise in April. They were under contract to purchase the home, but their appraisal came back lower than their offering price and the deal fell through.

"We were so excited to buy our own home,” Hansen said. “We had already made plans to add on to that house and build a workshop, only to have to start our search all over again. But that experience ultimately left us more determined and led us to the house we're in now, which is perfect for us." The couple used an FHFA loan and down payment assistance to purchase their new home.

Of all homes closed in February of 2021, 28.6% sold at or above their listing price. That is more than twice the share of homes that sold above the initial list price last year. Additionally, inventory fell 1.4% month over month, and available listings are now down 30.3% year over year.

According to a recent Zillow survey, making an aggressive or creative offer, mastering search technology and working with a knowledgeable local agent can help raise shoppers' chances of success.

To read more about Zillow’s latest market report, click here.

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